Wednesday, July 7, 2010

SPX AM UPDATE

I had mentioned a possible positive MACD divergence in the works on the daily chart (see MA chart below) several days ago. It appears that divergence is really picking up steam now.

There also appears to be one on the 60 min as well as highlighted on the bear and bull count. Something else to think about, the market has challenged and so far recaptured the broken neckline of the bearish head and shoulders pattern. If we close above that, coupled with the positive divergence and the alternate bull count, the bears may want to take a moment to regroup. Just some food for thought.


SPX BEAR COUNT

It is still certainly possible that wave iv is working out some type of corrective zigzag. Technically, it can correct all the way back up to where I have red i labeled.






SPX BULL COUNT

The same applies here for the wave iv count. However, the alternate labels (in gray) as I have placed previously may be in effect. 

If the alternate counts are a go, we are either in a wave (b) correction up or the start of a new move higher for Minor C.


 
 SPX MAs

This chart basically shows the daily positive divergence on the MACD and several layers of overheard resistance with the associated moving averages. 
Take note though of the move back over the broken neckline of the bearish head and shoulders pattern. If the market stays above that, there could be a case for a bullish reversal to occur (technically).


 SPX DAILY PATTERN

Here is another chart to chew on. All wave counts aside. 

Assuming the bounce off the Mar 2009 low thus far is only a corrective move, this chart may be indicating a further move higher in this correction IMHO. 

I base this on the following:

1.  The trend was clearly up starting in March 2009. 

2.  Starting in Sept 2009, the large consolidation occurs before moving on with the previous trend, which will be up.

3. Since the April 2010 high, the pattern displayed appears to be a bullish wedge all within the consolidation range.

4. So far, it has found support and bounced at the 38.2% Fibonacci retracement level.

Perhaps we stay range bound between 1000-1200. It certainly doesn't appear that the elusive P3 is here just quite yet, if at all.

Of course at the moment the MAs speak of a different trend (especially with the death cross), which is down but just trying to provide another perspective.



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